The Athens Stock Exchange is the best performing stock market year-to-date (+45.7%). The FTSE ATHEX real estate index has risen 62.7% so far in 2019. Banks have performed even better, up 108.2% year-to-date. The lifting of capital controls and the cut in ENFIA and corporation taxes will further support property prices in Q3.
President Xi’s extended trip to Greece last week was significant, both for understanding China’s plans to increase trade (and influence) within Europe, as well as the economic benefits recipient countries will receive as a result of China’s inward investment.
Greek Prime Minister Kyriakos Mitsotakis and President Xi Jinping visited the port of Piraeus last Monday to mark the New Democracy government’s approval of a further €611.8m in Chinese investments that had been frozen under Syriza.
COSCO’s investments since 2008 – when the shipping and logistics company acquired rights to operate terminals in the Greek port – have boosted container throughput at Piraeus from 685,000 in 2010 to 5 million containers last year. Piraeus will this year become the Mediterranean’s largest container port, and by some estimates currently handles 10% of Chinese commodities exported to Europe. Greek employment in the transportation & storage sector rebounded 20.2k in H1 to a new cyclical high.
Chinese investors have also been taking advantage of Greece’s ‘Golden Visa’ programme, introduced in April 2013, which offers residency in exchange for a €250,000 property investment. The Bank of Greece’s residential price index for apartments accelerated from 4.9% y/y in Q1 to 7.7% y/y in Q2. Apartment prices in Athens are rising even faster (11.2% y/y as of Q2).
The spending spree extends beyond Greece, however: over the past ten years, Chinese companies have acquired stakes in 13 ports across Europe, including in Spain and Belgium.
